Investigators say grocers have used property controls, which are added to leases, to stop rivals from opening on the same property.
A Federal Court judge has ordered the parent companies of both Loblaw and Sobeys to hand over documents to Canada’s competition watchdog, as part of an ongoing investigation into deals between grocery chains and their landlords.
The federal Competition Bureau is looking into so-called property controls that are added into leases and real estate deals in the Canadian grocery business, which investigators say grocers use to stop their rivals from opening up in the same shopping centre.
The court orders are the latest development in the bureau’s quest to inject more competition into the heavily concentrated grocery business, where five chains control about 80 per cent of sales. Investigators say property controls are stopping new chains and independents from getting a foothold in prime locations, leaving some Canadians stuck in pockets where the only choice for groceries is one or two of the Big Five.
The bureau announced Tuesday that the court orders will help investigators determine whether Loblaw and Sobeys are “restricting or excluding their competitors” by using property controls. But at this point, the bureau said in a statement, “there is no conclusion of wrongdoing.”
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